A sprawling Centennial business park is taking off with two big-time office and apartment projects.
United Properties plans on breaking ground in September on a new 212,000-square-foot office project at 720 S. Havana St. That building, along with a 285-unit apartment complex next door, will kick off construction at United’s planned 58-acre Inova Dry Creek office park in Centennial.
Inova Dry Creek will be a six-building complex stretching southwest from Havana Street and Easter Avenue and adjacent to Arapahoe County’s new Topgolf entertainment complex.
United Properties, along with equity partner Principal Real Estate Investors, bought the 58-acre site for $8.2 million last year.
“When we closed on the land in October 2014, we were under contract for an apartment developer on one of those parcels,” said Kevin Kelley, United’s vice president and regional manager. “The plan was to finish that multi-family sale first and finish on the commercial and office side next, and it’s gone that way pretty much like clockwork so far.”
Earlier this month, the team sold 8.5 acres at 7338 S. Havana St. to Wolff Co. for $6 million. Wolff is beginning construction on the 285-apartment complex on that plot, immediately south of where United plans to roll out the office construction.
Drawings also call for a pair of three-story office buildings, a single two-story building and a flex building at Inova Dry Creek on the remaining 49.5 acres.
United is launching into construction on the first office building without a tenant lined up. The project is on track to finish before the nearby One Belleview Station office building under construction at Belleview Avenue and Quebec Street, Kelley said.
The building will utilize so-called “tilt-up” construction, which Kelley said United could build for about $200 per square foot. The figure multiplied by the project’s 212,000 square feet pegs construction costs at about $42 million.
“This type of construction is very cost-effective, and it’s faster,” Kelley said. “We’re going to be able to deliver this project and offer rental rates at around $20 per square foot, triple-net.”
The five-story office building will break ground in September, and Kelley said he hopes to debut it in November 2016. Houston-based Powers Brown is the architect, and Adolfson & Peterson will be the general contractor.
Principal Real Estate Investors is an equity partner in the planned office building, as well as the original land purchase. Kelley said United has yet to close on a construction loan but is in talks with five potential lenders.
Newmark Grubb Knight Frank brokers Jason Addlesperger, Dave Lee and Mike Wafer will handle leasing at Inova. Kelley is guessing the first building will fill up with a handful of larger corporate tenants.
“The nature of the Southeast market is a larger-tenant market for the most part; we’re probably looking at full-floor tenants at the very least,” Kelley said. “We could conceivably go down to 20,000 or 22,000 but probably not much less than that.”
With one building ready to come out of the ground, Kelley said he already has an eye toward a second commercial building at Inova Dry Creek. He’s planning to start work on the single-story flex building, an 80,000-square-foot project, at the end of this year.
Moving forward, Kelley said United Properties is open to continuing to build on its own or splitting off the 50 acres to other developers.
“The plan is to get the project turning rather quickly,” Kelley said. “If that’s by development, great. If that’s by sale, that’s OK too.”